6 Steps to Help You Earn a Prosperous Retirement

How would you like to have $50,000 saved up for retirement, and then try to feel good about your chances for a comfortable old age?

Well, you would be in company, as according to data referenced in a recent retirement article on Moneywatch, 66% of workers have less than that amount saved for retirement. So actually, you might be ahead of the curve with that kind of money! And actually, with 28% having less than $1,000, the $50,000 figure is nowhere near the bottom percentiles in terms of savings.

Another thing it’s nowhere near is the point of being sufficient to meet retirement needs. Just how is someone going to survive on $50,000 retirement funds? Well, apparently many people do (or will have to), since two thirds of workers have less than that. Of course, it also depends on how old the people are. A 30 year old with $50,000 is in a much more hopeful situation than a 55 year old with $50,000.

I hope nobody feels too badly about reading these figures, but I think it’s important to say it as it is: that’s just not enough money. These figures seem consistent with a prior post on people being unable to cover a $2,000 expense, which revealed how little money people appear to have on hand.

In these situations, maybe the job of retirement falls to social security. That’s not exactly much money either in terms of cash flow, so perhaps grown children will have to be helping people. It’s not uncommon in other countries to have kids help parents, and maybe that will become more of a trend here out of necessity.

Anyway, this brings to mind the need to focus on the basics so we don’t end up in this position, and actually make ourselves more likely to be comfortable. Here are 6 steps to take to help earn a prosperous retirement:

Protect your career and cash flow

We will always have expenses, so there is some level of money that we need to have on hand to meet regular life expenses. If we lose income, we’ll quickly have to raid our savings. That’s no way to build a retirement nest egg. The so-called don’t lose money rule provides some good insight on this! Thus, we need to make sure that we invest in and protect our career.

Generate multiple streams of income

So, if the career or main source of income dries up, we could be completely messed up financially. However, by not putting all our eggs in one basket and diversifying a bit, we can open up other avenues to earn income. Multiple streams of income can not only be a good way to hedge our bets, but hopefully prosper as well!

Pay yourself first

Sure, there are some basic financial needs that come first. However, many other expenses are probably discretionary when it really comes down to it. I’d suggest paying ourselves first, and making sure that we’re regularly saving money.

Invest in yourself

One constant in life is change, and that means that we have to keep pace and adapt. No matter what many might say about education being overrated, I’d say that education and net worth go hand-in-hand – as long as there aren’t excessive student loans involved. Beyond that, always trying to do our best and put ourselves in the best position to succeed can help improve our income and earning potential.

Remember that Rate of Return Matters

It’s great to make money, and even better to make it and save it. But stopping there is almost like, using a football analogy, fumbling the ball at the one yard line. To score retirement success, we should make sure that we earn a good rate of return on our investments. Every percentage point counts!

Stay healthy

If we aren’t healthy, it could make it harder to work. Maybe even impossible to work, depending on the circumstances. If we can’t work, we won’t make money unless there is passive income has happening. Thus, keeping healthy is vital to giving ourselves the opportunity to earn money for our regular needs as well as retirement.

Additionally, the more health problems we have, the more we have to spend money on health care. The cost of health care in retirement is something that many of us overlook, but it can be absolutely staggering. There is no shortage of people who can relay stories of elders who spent inordinate sums of money on major health issues or care.

If healthy, we can live life to its fullest. That way we can not only be able to voluntarily retire, but enjoy it as well!

My Questions for You

Do you follow each of these 6 steps?

Can you share your most important tip for retirement savings success?

What do you think of those figures indicating that a majority of workers have less than $50,000 saved for retirement?

Comments

A little surprised to hear that so many don’t have more then $50k saved for retirement. I’m sure that has to depend on the type of job they work in. (minimum wage or off the books) One of the things I’m focused on is multiple streams of income. I’ve been a linear income earner for many years and now trying to generate residual income streams.

I’ve been wondering what is the general rule of how much one should save up for the retirement. I feel like I retire I would want to do all sorts of things such as traveling because I’ll be bored if I only stay at home… But then I have to save up more.

I follow most of these 6 rules, but I think another one to add is stay out of consumer debt. It’s so much harder to build up a substantial nest egg when you’re constantly paying off debt. I’ve been working on the multiple streams for a while now and am seeing some return. I’m really focusing on saving this year, now that most of my consumer debt it paid off. Whoo hoo!

My main areas of focus are to develop several streams of income and develop healthier habits. I’m turning 30 next week, so I really want to take charge of my health in a variety of areas including diet and exercise. I’m sure if will be a lifelong struggle, but I need to take it seriously.

I recently wrote on this topic Ray and what is even more concerning is that the average retirement savings for working families is about $3000! Many american families have saved nothing for retirement. I am fortunate that I have a pension and savings so I am ahead of the game in that area for now. Your point about living a more healthy lifestyle is so important and can have huge implications for not only the quality of life and longevity, but real financial implications for you and your family!

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Disclaimer

We are well meaning folks that are not investment professionals or financial advisors. Please feel free to have fun here, and take this information in the spirit of entertainment, as it is not financial or legal advice, For that, seek an appropriate professional. Your actual financial decisions are your own responsibility. Thank you.